When is a Wrecked Car Totaled?

Insurance companies and/or the state classifies a wrecked car as totaled when it is too damaged to be considered safe. They may also do so when the cost of repairs surpasses the actual cash value of the car.

It can be a pain in the neck to hear your insurance adjuster say that your car has been classified as a total loss. To the naked eye, it doesn’t appear as though your car sustained that much damage. So why in the world would an insurance provider tell you that your car essentially isn’t worth fixing?

Determining an Actual Cash Value

When you file an insurance claim, your insurance adjuster first determines the value of the car. They use information such as Kelley Blue Book pricing, market value, car report, vehicle make, model, year, and current condition. Based on these, a claims adjuster can give an estimate on what the car is worth minus depreciation.

Estimating Cost of Repairs

To determine if your wrecked car is in fact totaled, get an accurate estimate of what damage repairs would cost. Take your car to a mechanic and/or auto body shop to evaluate the damage. Ask them to provide an estimate on the cost of repairs. This information is then provided to your insurance provider for further determination.

Assessing Salvage Value

Salvage value is also taken into consideration when determining if your wrecked car is in fact totaled. This is the amount an insurance company would get for salvaging the parts and metal in your vehicle. Essentially, it is the resale value of the wrecked car once it is no longer useful.

Making a Decision

Your insurance company will then review the cost of repairs compared to the actual cash value of the car. If the repair costs are higher, most insurance companies will at this point classify the wrecked car as totaled. At this point, you can choose to keep your wrecked car and obtain a salvage title. Alternatively, you can go for the payout from your insurance provider.

State Requirements

There are exceptions to these rules of course. An insurance company may be willing to make the repairs on a car. However, if your wrecked car is close to or surpasses the state’s total loss thresholds, it’s another story. Unfortunately, there is nothing you or your insurance company can do about it. A total loss threshold is essentially the percentage of value that determines when a car is totaled. In other words, if the total cost of repairs and the salvage value exceed the actual cash value by a certain percentage (in most states its 70 – 80%), the state declares that it’s a total loss.

It can be a bummer to hear that your precious car is now considered a total loss. Trying to find insurance coverage or an independent buyer can prove difficult. The good news is you still have options. If you have a wrecked car and the insurance payout isn’t much, call Sell My Car Online at (855) 929-0828. We are wrecked car buyers near you and we’ll give you the best possible offer.